Cosan Shells Out $950m for Esso Assets

Brazilian ethanol giant Cosan has acquired Esso Brasileira de Petroleo from ExxonMobil for a total consideration of $954m. Cosan paid $826m for 100% of Esso’s equity, and took on $163m in debt and $35m in receivables. “We consider this acquisition price very attractive,” Cosan’s CFO Paulo Diniz said on a call following the announcement. Cosan outbid Petrobras in an auction for the assets. While he claims the company’s current liquidity position would allow it to pay for the target outright, Diniz said Cosan will apply $310m it received from a rights offering earlier this year towards the purchase, Diniz adds. The remainder will be financed in the markets, most likely in the debt markets, he said. One banker away from the deal said the company is eyeing a loan market transaction. A Cosan IR officer tells LatinFinance the company will take the next few months to decide on the best asset class to tap. She also suggested Cosan’s current banks Morgan Stanley and Goldman Sachs, which advised Cosan on the purchase, as well as Credit Suisse, are likely to be tapped for a financing mandate.